The 2015 legislative year was marked in most states by fiscal partisanship, unpredictable revenues and continued pressure to lower taxes. The new year is unlikely to be any different. More than a dozen states were too deeply split to meet their formal budget deadlines in 2015, and many of those will miss them again. More than a third of the states are now splitting power between the parties. By early December, two of those split states, Illinois and Pennsylvania, had gone deep into the 2016 fiscal year without a budget being enacted.
In some states, the drop in oil and natural gas prices will continue to put pressure on budgets, as in Alaska and Oklahoma, which are dependent on energy revenues. Both are likely to face spending cuts, higher taxes or both. But a more enduring problem for many states is systemic financial imbalance. In these states, legislatures have tended to paper over prior budget shortfalls with one-time fixes; now, as revenue shortages persist, lawmakers are left with a list of increasingly unappealing choices. If 2015 was any indication, legislatures will wait until the last minute before settling on the best of their bad options.